Running Your Indoor Golf Business
The Drive to Great Profits
The first question most business owners ask is, “How much do I charge my customers for using the simulator?” This is a great question and the answer is dependent upon your business. Here we will llook at different revenue models and which will work best for your clientele, location and services.
Charge by the Hour
The seemingly easy method for making money is to charge by the hour. This strategy is generally more effective in establishments with a variety of activity. Sports bars and family centers are the most logical setups for this type of billing as the environment is more casual, and patrons have the opportunity to experience many different types of entertainment. The drawback is that it is hard to determine how many holes can be played in an hour. In a pure golf center it can be frustrating for players to pay more when their time runs out or if they finish a round in less time they have paid for. Many times you will discover it takes longer for clients to play a full round than you think. This can be an issue when you are scheduling tee times and making appointments.
Charge by the Round
Another method is charging by the round. You can have set charges for playing 9 or 18 holes (even 3 holes works as an option) per golfer depending. Many people are used to this way of paying as it is essentially the same method used at traditional courses. This strategy does require a more attentive staff as well as an onsite "Course Marshal" who regulates play and keeps an eye on slow players. While it does require a little more management, upscale indoor club patrons appreciate this structure as it allows them to get in a full round of golf. Committed golfers who want to focus on recording a score and getting better, gravitate towards this pay schedule.
Combine Both Methods
In most indoor golf centers owners combine both methods, especially when there are multiple simulators. One or two simulators can be dedicated to full rounds and charges are based per number of holes and rounds. Other simulators are dedicated to hourly play to accommodate customers that want to work on driving, chipping or just play for entertainment. This allows flexibility for both your business and your clientele. If you employ this hybrid approach you can also test out what works for your golfers.
One of the greatest opportunities comes from Cloud Competition. Your clients can participate in world-wide tournaments on some of the best known courses for an entrance fee. Not only can you offer large events, you have the opportunity to join or sponsor local or regional tournaments with your sponsors. The possibilities are endless with the cloud. Learn more here.
Once your business is up and running you can begin offering memberships to patrons and regular users. For a monthly or yearly fee they can have access to the simulators more often or you can set aside certain times of day for membership players only. Since these are your best customers you will be able to encourage them to bring their golfing friends and grow a separate part of your business.
What Do I Charge?
Once you’ve decided what method you want to use you need to determine exactly how much to charge. The biggest temptation is to start low and attempt to lure customers with cut rate prices. Don’t go too far with this. Once you have set this precedent you are cheapening the perceived value of your state-of-the-art simulators. To get your pricing right it is important to know what the market in your area will pay for a round of golf. While this is dependent on your particular market, one formula is to check the charges at a local municipal golf course. Find out what they 18 holes plus cart and make your rate for 18 holes one half their fees. (Remember, a full round on the simulator takes less than 2 hours.) For instance, if the local course charges $70 for 18 holes with a cart you can charge $35 per round. If your customers are playing 18 holes in two hours you can charge $18 per hour for simulator time.
When considering the price of a membership you will want to consider what your top players are spending each month on rounds and hourly rates. When clients are new to indoor golf there could be a fair amount of shock when you ask for $500 membership fees, but once they know the value you offer, your top customers will become a loyal customer base with residual income. One of the establishments we have outfiited is charging $100 per month per member and their numbers look really good!
Plan, Focus, Succeed
These are just a few methods to create revenue from your indoor golf center and while they work for a large number of businesses, you will need to take the time to research your market carefully. Creating a smart business plan you will build a strong following of repeat clients. Focus on your plan, listen to your customers and you will be on the path to success.